Australian Retailer Enters United States

One of the most familiar names in the Australian pool and spa industry has made its first move in a plan to cover the U.S. Sunbelt. If it takes, not only will the move introduce another major retail chain, but it will count as another in the growing group of franchised companies in the U.S. pool industry.

In early March, PoolWerx, a 22-year-old firm based in Brisbane, Queensland, purchased the assets of Phoenix-area pool and spa retailer Cactus Valley Pools, including its 16 stores — nine company-owned, seven franchised — and nine service trucks.

David and Aaron Hagen, who formerly owned Cactus Valley, will serve in a consulting capacity for a short time to more smoothly transition the business, said PoolWerx CEO John O’Brien.

The Australian firm did not purchase SellPoolSuppliesOnline.com, the website owned by the Hagens.

The Cactus Valley transaction is but a first step, and PoolWerx intends to enter more than the Phoenix market. The Cactus Valley locations will serve as a means for the Aussie firm to break in and acquaint itself firsthand with the American industry.

“We saw that 16 stores was a nice size, and Phoenix is a great market for us to test and change our model for the U.S. experience,” O’Brien said.
PoolWerx plans to use the summer for such a breaking-in period, then begin rolling out more deals throughout the Sunbelt. Some are currently in the works, though O’Brien did not disclose their regions.

“We’ve got a handful of small groups of stores that are in various stages of due diligence,” O’Brien said. “That’s not in Phoenix — that’s spread across the country. We’ll look to those coming on board mostly likely after the summer, although there are one or two that could drop during the summer.”

Future locations will be added via franchise agreements. Using this model, PoolWerx has a detailed 10-year strategic plan that sees its name adorning approximately 300 stores across the Sunbelt in five years.

“Remembering there are over 13,000 pool stores in the U.S., we think 300 is, if anything, a very achievable number,” O’Brien said. “… There seems to be a real thirst for franchising.”

In its home country, PoolWerx represents approximately 10 percent of the market, with 240 franchises, including 85 stores and 300 service vans. Each location not only contains a store, but averages three service vans and performs renovations.

“The only thing we don’t do is construction,” O’Brien said.

The average revenue per store is $852,000, and many franchisees hold multiple properties.

For the time being, PoolWerx will consider markets in the Sunbelt with at least 2,000 residential pools and more than 20,000 residents.

After spending the past two years traveling across the country, O’Brien said, PoolWerx executives have come to believe there are plenty of gaps to fill. “There’s a lot of under-serviced markets …,” he said. “We think we could bring a bit more professionalism in the way we do things into some of those smaller regional cities and smaller towns.”

The firm’s model also includes an e-commerce site that works in conjunction with franchisees. Consumers purchase equipment and products on the website, but sales are credited to the local franchise operation, which will deliver, install and perform warranty service on the items. If customers encounter problems, they can contact the local franchisee for a solution.

The U.S. website will likely launch in the fall. It has not been determined where the site will be headquartered.

PoolWerx will export some of its management to the States to run the operation. The husband/wife team of Dianne and Darrell Doust, 18-year employees of PoolWerx, will head the U.S. operation out of the Phoenix offices. Darrell Doust specializes in systems operations, Diane Doust in marketing and human resources. Senior Vice President of Strategic Development Troy Hazard will be based in Florida. Franchise Development Vice President Jeremy Winter also joins the American team and will head the recruitment effort.

“Like any company, I think it’s very important to bring executives from the home office to help with the transference of the culture and systems,” O’Brien said.

PoolWerx’s network of franchisees will include some existing American operations whose managers are seeking increased purchasing power as well as support in corporate functions such as training, marketing and human resources.

“We think there’s a great opportunity for ma-and-pas who are looking for more support to convert their existing business to a PoolWerx branded business,” O’Brien said. “So we think conversion will be successful for us.”

However, the firm also will seek people from outside the industry, as does the Macon, Ga.-based service franchiser America’s Swimming Pool Co.

“Our industry … is an aging industry, and we need more new blood,” O’Brien said. “Franchising has systems to train and support people from outside our industry and give them the confidence to come in.”

According to O’Brien, a move to the United States was always considered an inevitable stage in the company’s growth.

“We started [with] a view of creating a global franchise within the pool and spa retail and service aftermarket,” O’Brien said. “It was always our plan to take our franchise system to the United States.”

It was about to take its first steps in 2008, even attending the annual convention for the International Franchising Association. But the Great Recession quashed that plan.

“We saw the economic storm clouds gathering and we packed our bags and went home at that time,” O’Brien said. “I think that was a good decision in hindsight. But the American economy is bouncing back.”

PoolWerx is a privately held company that previously had two shareholders — O’Brien and Terry Morris, a 15-year, non-executive partner. With the U.S. move, the firm has drawn four more shareholders.

The company’s branding includes fully wrapped vans with a distinctive aqua-colored grid pattern. All retail and service staff wear bold dark aqua and red shirts with the PoolWerx logo. The company

recently began veering toward smaller stores, O’Brien said, but has invested more in the design inside and out. PoolWerx uses planograms to help determine the internal layout. Designs have been implemented based on input received from focus groups composed of women.